We have developed a method for fabricating thin layers of Ce3+ doped yttrium aluminium garnet, Y3Al5O12 (YAG:Ce) based on a sol-gel approach with propylene oxide as a gelation initiator. A single spin-coating process followed by a sequence of heat treatments allows the fabrication of polycrystalline YAG:Ce thin layers with a thickness of a few hundreds of nanometers. Surface morphology, crystallite size, and quantum efficiency are examined as a function of heat treatment temperature. The optical quality of the layer is further investigated by measuring the enhanced absorption of light coupled into the layer. We fabricate a three-layered slab waveguide system consisting of a fused silica glass substrate, a YAG:Ce layer and a SiO2 upper layer, and excite the system by illumination through a prism. The incident light couples to the fundamental waveguide mode in the YAG:Ce layer where it is eventually absorbed, resulting in an enhancement of absorption by a factor of 30. In correspondence, we observe a similar increase in emission intensity of photoluminescence caused by the enhanced absorption.